Ending harassment helps the economy too
Legal protection for women encourages financial inclusion
by Christine Lagarde, Corinne Deléchat, and Monique Newiak in Washington
Thu 8 Mar 2018
This International Women's Day is bringing new calls for progress on gender parity. Giving women and girls the opportunity to succeed is not only the right thing to do – it can transform societies and economies.
Unlocking this transformative potential means pushing for more equal opportunities. This must include uniform legal rights for men and women and equal access to education, health and finance. Just as important is ensuring a safe environment for all, including protection against harassment. Providing legal protection against sexual harassment creates an environment in which women are more likely to be economically and financially active.
New research from the International Monetary Fund, published in a working paper entitled 'What is Driving Women's Financial Inclusion Across Countries?', finds a link between financial access and protection against harassment. The data are drawn from surveys of 1,000 individuals in each of more than 140 countries, and show that women are less likely than men to gain access to financial services. This is especially the case in emerging and developing markets, where financial inclusion scores are around 14% lower for women than for men.
The IMF's staff research investigated the forces that propel access to financial services for women. The findings show that women who live in countries with stronger protection against harassment are more likely to open a bank account, borrow and save, and make greater use of financial services such as mobile payments. Financial access for the average woman living in an emerging market or developing country is almost 16% deeper – that is, financial inclusion scores are higher – when legal protection is granted. For the average sub-Saharan African woman, the figure is almost 25% higher.
Increased financial access means a greater rate of economic activity among women, including as entrepreneurs. This translates into higher economic growth and productivity, more equal income distribution, higher profits for businesses and greater economic stability.
These discussions are important and overdue, but they are only the start of the debate. A detailed database and reports by the World Bank reveal some startling figures. In 2017, almost 290m adult women were not legally protected from sexual harassment, and more than 360m women were not shielded from harassment in employment. In almost one-quarter of countries, there is no protection against domestic violence. This lack of legal protection affects girls at an early age. In some countries the legal age of marriage is different for women than for men, and almost 100m girls are not sufficiently protected legally from being married as a child.
Changing laws is insufficient – they must be complemented by enforcement. Governments can act to improve other policy areas as well. Fiscal policy can play a larger role through investments in transport safety and sanitation facilities for women and girls, and in support for victims of gender-based violence.
The IMF is committed to working with governments to identify policies that help women realise their potential. Aside from analytical work on the macroeconomics of gender, the Fund is expanding its country-level analysis and advice in this area. To date, the IMF has advised on gender equality issues in more than 30 countries.
This week the IMF publishes a study on Nigeria showing that reducing gender inequality could increase real GDP growth by an average of 1.25 percentage points annually. A range of measures are recommended, such as strengthening and enforcing legal rights; increasing investment in infrastructure, health and education; and policies to help reduce violence against women. Meanwhile, IMF-supported programmes in Egypt and Niger include measures to empower women economically, such as investments in public nurseries and better transport safety.
The advice given to advanced economies likewise emphasises the need for policies to help women participate in the economy. These include appropriate parental leave schemes, affordable and high-quality childcare, and tax policies that do not penalise secondary earners.
It is not enough to talk about gender equality on International Women's Day. Policy-makers must continue to address this issue and keep it at the top of their agendas throughout the year.
Christine Lagarde is Managing Director of the International Monetary Fund. Corinne Deléchat is Division Chief in the IMF's African department, and Monique Newiak is an Economist working on Nigeria in the department. This article first appeared on the IMF Blog.
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